Sharon Gallagher is white but she knows what it is like to be part of an ethnic minority. For the past 18 months she has lived with her three children in the predominantly Asian district of Manningham in Bradford. This was once a white area, but over the past 30 years most of the whites have left; today Manningham is home to Pakistanis and Bengalis, halal butchers, Islamic book stores and mosques. And it is home to the Gallaghers. They are the only white family on their street and one of the last left in Manningham.

Sharon is 34, but single parenthood, homelessness and bad relationships have left their scars. When she speaks, I can't help noticing she has only two lower teeth. "You can walk all day round my street," she says, sucking on a cigarette, "and you can walk all the way to the shops and back and you won't see any whites."

There are four mosques in the area, one overlooks Sharon's home; five times a day, the call to prayer drifts from the minaret down to the backyard. It has become so familiar that the children can do a decent recital of the muezzin's words. At school, the Gallagher children are pink exceptions to a brown rule. Such intense exposure to a different culture has affected each child differently.

"If you're white and you ain't hard you're fucked." It is a crisp bright Saturday afternoon, we are in a McDonald's restaurant in Bradford and 11-year-old Jake Gallagher is explaining what it is like being white in his neighbourhood. His sister Ashlene and cousin Jade listen in. "I used to get picked on at school," he says, fiddling with the baseball cap that partly hides his carrot-coloured hair. "They would call me 'white bastard' and we would get into a fight."

Thirty years ago, it was young Asians who were bullied in Manningham. Children would be picked on as they walked to school, and their mothers were too frightened to walk outside their homes. Today, Asians are not so meek. They have long memories and some choose to take it out on those whites who remain. "I know they have troubles in places like Detroit," Jake tells me, "but if a white person from there came to Manningham for a week they would come home crying. It's not that I am harder," he adds "but you have to be tough just to live round here."

For young boys like Jake and his cousin John, the world is divided into two groups: the Pakis and the Porkies. The Pakis are the Muslims who seem to go to the mosque a thousand times a day, who fast and pray and have to watch what they eat. The porkies can be white or black or mixed race, but what unites them is that they are not Muslim. They call themselves porkies because, unlike the Muslims, they can eat pork. It is not a racial category you will find on any census form, but the concept of porkie says something new and profound about how some are forming their cultural identity in urban communities. The rise in mixed marriages has spawned a generation of children for whom the old race distinctions have blurred into irrelevance; it is not about whether you are black or white anymore, it is about whether you are a paki or a porkie.

Listening to Jake describe his fights with gangs of Pakistanis it is tempting to feel despondent. Until you meet his sister. Like millions of other teenage girls, Ashlene adores Gareth Gates, who is a local hero in Bradford, and even has a signed poster of him on her bedroom wall; she loves EastEnders and Hollyoaks and would like to be an actress or a pilot when she grows up. But Ashlene has another ambition: she wants to be a Muslim. Alongside her school exercise books are slim volumes with titles such as Islam for Children, The Supreme Prophet and The Rule of Allah Alone: Sunni Islam's answers to the problems of the modern world. The imam of the local mosque gave her the books.

The mosque is where most of the other children go after school for two hours of Islamic education. One afternoon Ashlene and her 10-year-old sister Amie decided to see what went on inside the mosque. Maybe it was curiosity that led them there, perhaps it was boredom from walking the deserted streets of Manningham, or maybe it was because they had nothing to go home to. Whatever it was, the imam was so impressed by them that he asked Sharon for permission to let them go regularly. They can now read and speak Arabic.

In one remarkable scene in a Channel 4 documentary about the family, the brown-eyed, freckled Amie astonishes a local pizza shop owner by reciting from memory some verses from the Koran. The shocked shop owner rewards her in the only way he knows how: with free pizza and coke.

Ashlene is one of only eight white girls in her year at her school. Twenty-five years ago, the student population at Belle Vue girls' school was evenly divided between Asians and whites. In the summer of 1978, Margaret Platts was a PE teacher there. "We knew even then that things were changing," she recalls. "The head at the time talked a lot to us about what an increasing Asian population would mean for the school."

In the intervening years, Bradford has come to symbolise the bruised state of race relations in this country. The Honeyford affair 19 years ago (when local headmaster Ray Honeyford was forced out of his job after saying white children suffered in schools with a large Asian population) prompted a white flight of frightened parents; there have been book burnings and race riots. When Platts returned to Belle Vue this autumn as head of the school, the comprehensive had become 98% Asian. "The separation of communities has become much more marked than it was before," Platts says quietly. "We used to draw some white children from the estates around the school, but now they bus out to other schools."

I was one of only a handful of Asians at my school; like any child I wanted to fit in and, for me, wanting to belong meant being more like my white friends. For Ashlene - who has grown up in the shadow of the mosque, and whose school friends are Muslim - wanting to belong means wearing a shalwar kameez to the mosque and declaring that she wants to be a Muslim.

When Sharon Gallagher was 12 years old she had a mixed-race friend who would scrub her skin to try to make herself white. Today, Sharon has one son who wants to be Eminem and a daughter who wants to be a Muslim. The Gallaghers may not have attended any citizenship classes, but her family offers a preview of a new urban identity. Sharon is facing many of the same issues that Asians have been dealing with for decades, but her neighbours treat her better than they were themselves treated in the past.

I left Bradford convinced that the Gallagher children are better for having lived where they do. I am less sure that can be said for their neighbours and classmates: the Pakistani and Bengali children being raised and schooled in an environment where they can forget that in the world outside Manningham it is they who are the real ethnic minority.